Strategy Analysis for General Electric Company
8 billion. The current situation at GE is that its bonds are down, while its stock is at $14. 26 for every share. This is the lowest GE has hit from the period of the recession since 2009. GE has been experiencing weakened demands for energy-related products such as oilfield equipment and gas turbines. In 2001, Welch was awarded the largest retirement package worth $420 million, which included tickets to high-value sporting events, lifelong use of airplanes and related GE facilities. GE reduced some costs after the stepping down of Immelt. The crisis of 2008 marked a point when GE was forced into making big and bold decisions. GE chose going back to innovation and moving away from finance. GE sold off its financial assets with a goal of making things which meet the needs of the emerging markets (Immelt, 2017).
During Immelt’s time at the helm of leadership, he undertook a series of transformations, which are called strategic decisions which affected the company and led to its current situation. The company changed its portfolio by focusing on the main industrial business. Immelt divested slower-growth, nonindustrial businesses, and low technology. However, this was not inclusive of the GE Capital which supported the company’s industrial businesses (Sachs, 2018). GE reestablished itself as a technology company but did not emphasize research and development. This began a trend where many believe is the reason for the current situation of GE. A major strategic decision was undertaken by GE which led to its current misery is capital allocation. This is explained by the ever-shifting portfolio of organizations.
The acquisition of Alstom in 2015 by Immelt contributed to its current situation. Alstom is a big French rival for the largest business of GE Power, and it makes and services huge turbines used in the generation of electricity (Sachs, 2018). These were the strategic mistakes which resulted in the current situation faced by GE. Strategic Issues Currently Facing GE i. Technical delays and problems with the Predix software. GE has had technical issues with Predix, its software which links equipment such as elevators and turbines to computers for the prediction of failures and reduction of operations costs. ii. iv. Keeping up with the market trends. The business sector is one which has experienced a rising number of companies which have been formed to handle manufacturing different products.
Many measures have been established for these companies to succeed in their operations. Proposed Strategic Options 1. Avoiding this issue needs the strategic option of providing a budget to GE which is not only aimed at hiring people but undertaking projects individually. This is a catalyst for collaboration for cross-businesses. For instance, GE bankrolled a multimodal industry in India and this made various products for different organizations. This had an effect of persuading businesses into co-funding efforts. A major advantage of this strategic option is that it paves way for more and advanced decision making. Innovation would provide GE with a good business network to ensure the company is well placed in line with the rivals. Innovation would assist GE in developing new ideas that are utilized by the organization in moving forward in exploring new adventures (Hinterhuber & Liozu, 2017).
This helps in solving the weakened demands for energy-related products for GE. Innovation would help the company from moving away from the expansion of the financial sector of the company. When implemented, it is expected that GE should have increased profits as a result of innovative ideas. GE would be better positioned in the Red ocean competition. References Drucker, P. Innovation and entrepreneurship. Routledge. Hinterhuber, A. google. com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwicrZm7jpvdAhVDXxoKHbe_DukQFjAAegQIABAB&url=https%3A%2F%2Fhbr. org%2F2017%2F09%2Finside-ges-transformation&usg=AOvVaw0a-VcklVzqZizgOMmgX-7h Egan, M. (2017, November 20). How decades of bad decisions broke GE [Web log post]. google. com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwiGydTQ7JrdAhVDJhoKHU9oDLcQFjAAegQICRAB&url=https%3A%2F%2Fwww.
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